Ten years ago, Bernard Rose proclaimed that digital technology would change the face of movie-making, and he made a film to prove it. Ivansxtc, released in 2000, wasn't just a calling card for digital cinema: it was also Rose's goodbye card to the industry that had previously shackled him – a scathing critique of Hollywood rendered in a new, raw aesthetic.

Ivansxtc chronicled the final days of a Hollywood agent, played by Danny Huston and based on Rose's real-life agent, Jay Moloney, a cocaine-addicted golden boy who killed himself in 1999, aged 35. Faced with death, Huston consoles himself with drugs and prostitutes, while his colleagues treat his impending exit as an inconvenience and an opportunity. The film is a glorious mix of sleaze and grace, a tragedy and a bridge-burning exposé – close enough to the bone to suggest that Rose would never work in that town again, and didn't much care.

"Yeah. Well, I think that's definitely not the case any more," says Rose. I last met him around the release of Ivansxtc, when he was fired up with messianic zeal. He looks different now, cooler and healthier. I ask how he's changed and he pauses for a long time. "I was a lot more ... angry. A lot more … sort of … at war with myself. Now I don't feel that at all."

Hollywood has prevailed, of course. Rose still lives in Los Angeles, and he has worked in that town again. But he has also continued along the path he hacked out with Ivansxtc, following up with 2008's The Kreutzer Sonata, and now with Boxing Day. As well as the low-budget, digital treatment, what links these three films is that they all star Huston, and are based on Tolstoy short stories. Ivansxtc was an update of The Death of Ivan Ilych. The Kreutzer Sonata transposed Tolstoy's study of marital jealousy to modern-day LA. Boxing Day reimagines his Master and Man as an ill-fated road trip through the Colorado mountains. In Tolstoy's original, a wealthy landowner and his driver get lost on their way to buy a forest; here, they are a desperate would-be entrepreneur (Huston) and his irritatingly talkative chauffeur, cruising the mountain roads, prospecting cheap, foreclosed properties.

The parallel works extremely well. Tolstoy's themes of class division, capitalist amorality and spiritual emptiness resonate with a credit-crunched America; the insistent voice of the car's GPS reminds the two men that "guidance cannot be provided". "What's great about Tolstoy is that he asks the big questions," says Rose. "The existential, spiritual and emotional questions, and he really tries to answer them. None of those questions have been resolved by us in the slightest – we're still dealing with the same things."

It was Tolstoy who soured Rose's relationship with Hollywood in the first place. In his early career, he had been making great strides. He left school at 16 and cut his teeth on music videos, directing Frankie Goes to Hollywood's Relax, among others. His first few features were well received, including the horror film Candyman and Beethoven biopic Immortal Beloved, with Gary Oldman. It was through the latter, specifically Beethoven's Kreutzer Sonata, that he discovered Tolstoy. "After that I was like, 'This guy's really good, man,'" Rose says, mocking himself with a fake American accent.

Then he took on Anna Karenina. It was a major production: all the period trimmings, shot in St Petersburg, a cast led by Sophie Marceau and Sean Bean. But a nervous studio cut the film by half an hour, and the result was a critical and commercial failure. Rose blames himself, too. "What was wrong with Anna Karenina had as much to do with the manner of adapting it as anything else," he says. "You take an 800-page masterpiece and try to make it into a normal-length movie – in the end you just boil it down to a story about a woman who leaves her husband for a man who gets bored. And, of course, that's not the impact of the book. What I realised was that all the carriages and costumes and ballrooms, all that stuff just got in the way. None of it's got anything to do with the story. Really, the only way to make the story work was to use the same level of honesty Tolstoy used."

There's a fundamental film-making point here: if a classic text is still relevant, surely it doesn't need a historical setting? It's a question worth asking when literary period movies are being churned out: we've recently been inundated with Dickens, Austen and Brontë, not to mention another Anna Karenina. Rose hasn't seen Joe Wright's recent version. "But if I was going to do Anna Karenina now, I would make her a Beverly Hills housewife, and have her throw herself under an SUV in the valet parking lot."

Thanks to digital, Rose is free to make films the way he wants, but it's hard work. On Boxing Day, he is credited as director, screenwriter, cinematographer, editor, even composer and musician (he's a classically trained pianist). Most of the shoot consisted of just Rose, a sound recordist and the two actors. "When I think about it, we were pretty stupid," he says. "It was just four of us in a car, no backup. You're 10,000ft up. The GPS doesn't work and there's no phone signal. And it was unbelievably cold: -18 Fahrenheit [-28 degrees celsius], which is not funny." In a paradoxical twist, it doesn't look as cold as it really was, Rose explains, since there is no visible condensation on the actors' breath. It was so cold and dry, the air had no moisture in it.

Digital film-making hasn't yet brought Hollywood down, Rose admits, but there's still time. Anyone can make any film they want now, but getting it seen is a different matter. "The inevitable effect has been an enormous glut of unreleased movies," he says. This year's Sundance film festival, for example, received more than 12,000 submissions. "But I think this will evaporate in the next five years, because everything's going to be online. The thing that's really going to kill them is the distribution. When everything goes online, which is already happening, it's gonna change a lot. And then the next question is, can you get paid for it?"

Ivansxtc did not get Rose cast out of Hollywood, or not for long. "I don't think there was any kind of fatwa," he says. Two years ago he directed Mr Nice, a jaunty studio biopic of drug dealer Howard Marks (Rhys Ifans). He's also just finished a major film about Paganini, shooting in Berlin and Amsterdam. "I'd still direct the next $100m superhero movie if someone asked me to," he says. "But it's nice to do a range of things, big and small. And one feeds on the other. I found that when I went back to doing bigger films, the way I was doing that had changed radically."

Rose isn't done with Tolstoy, either. He's already completed a fourth low-budget film, Two Jacks, based on the short story The Two Hussars. Again it stars Huston, alongside his nephew Jack Huston, in a tale contrasting old and new Hollywood. Will that be it: a Tolstoy quartet? "There's actually one more story," he says. "I do have a harebrained scheme to do War and Peace." His version would be set during the second world war and the siege of Leningrad, he enthuses. By his calculations, he could bring it in at about 35 hours – a meaty mini series. There is just one minor stumbling block: he hasn't read the book yet.